BSP affirms repeal of fintech SquidPay's license to operate

The Bangko Sentral ng Pilipinas (BSP) has stripped off with finality the license to operate e-payment system and mobile e-wallet of SquidPay Technology Inc.

In a statement, the BSP said the policy-setting Monetary Board denied with finality the motion for reconsideration of SquidPay on the revocation of its Electronic Money Issuer-Others (EMI-Others) and Operator of Payment System (OPS) registration in a resolution (Resolution No. 87) dated January 19, 2023.

To recall, the Monetary Board affirmed its decision -- dated June 2, 2022 -- revoking the EMI-Other license and the cancellation of OPS registration of SquidPay.

The BSP did not specify the reasons or provide details on the violations made by the financial technology firm that resulted in the revocation of its license and registration.

However, the central bank said SquidPay violated its “notarized Deed of Undertaking,” citing Sections 402-N, 501-N and 601-N of the Manual of Regulations for Non-Bank Financial Institutions (MORNBFI), in relation to Section 37 of Republic Act (R.A.) No. 7653 or The New Central Bank Act, as amended.

Also, the BSP cited R.A. No. 9160 or The Anti-Money Laundering Act of 2001, as amended, and its Revised Implementing Rules and Regulations; and the Section 19(e) of R.A. No. 11127 or The National Payment Systems Act.

The revocation of SquidPay’s EMI-Others license and the cancellation of its OPS registration came amid the criminal complaint for estafa filed by listed Premiere Alliance Horizon Corp. (PHA) against SquidPay founder Marvin Dela Cruz  and PHA director Augusto Antonio Serafica Jr. for allegedly misappropriating P32 million in corporate funds.

‘Deeply saddened’

In a statement, SquidPay said it is deeply saddened by the BSP’s decision, describing the revocation of its license as a “severe penalty” despite its “best efforts to fully address the concerns from our initial audit, which included a voluntary proposal to undergo rehabilitation with supervision as needed.”

The fintech firm said it “assures the public that it has never been involved in any incidents related to cybersecurity breaches, theft, loss of public funds, or money laundering.”

“Rest assured that SquidPay is truly committed to exploring all legal remedies in order to continue serving Filipinos,” the company said.

SquidPay recognized that, as a startup, it has a long way to go to match other established EMIs.

“SquidPay emerged from the pandemic with challenges, yet we still managed to become an actively operating EMI. We firmly believe that, like every other small Filipino entrepreneur, including SquidPay, we all deserve the chance to grow and improve, to endeavor for success with complete guidance and support rather than being faced with immediate termination,” it said. —LBG, GMA Integrated News